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Companies Asked to Donate Unused Patents

Posted by Hemos on from the bring-out-yer-dead dept.

Radon360 writes "There are countless patents that are promising but sitting idle, stowed in the corporate file room. In fact, about 90 percent to 95 percent of all patents are idle. Countless patents sit unused when companies decide not to develop them into products. Now, not-for-profit groups and state governments are asking companies to donate dormant patents so they can be passed to local entrepreneurs who try to build businesses out of them. "

3 of 140 comments (clear)

  1. Defensive Patents by diablovision · · Score: 4, Informative

    Many companies use patents defensively (or counter offensively). The company will patent technology or process X, though they may decide that it is better done internally with process Y. Or they may simply make the strategic decision that the effort and resources expended in pursuing profit in the patent are better spent pursuing something else. Nevertheless, the patent still has value to them because it gives them more options.

    1. It helps deter competitors from launching patent infringement lawsuits against them, because they have patents that can be used in a counter suit.
    2. It prevents competitors from utilizing the technology that they developed.
    3. It gives them business options that they would not otherwise have if they didn't have the rights to the patent.

    I doubt that most patents that are classified as being "unused" or "sitting around" still aren't providing some kind of value to the company that pursued them in the first place. It tends to be the nature of business that companies will look for ways to leverage their assets maximally. Besides, if the patents were valuable, the company would already have pursued licensing the technology to another person/company who can develop it into something viable.

    --
    120 characters isn't enough to explain it.
  2. Re:Tax break for donating patents by mpe · · Score: 4, Informative

    Perhaps giving companies a tax writeoff equal to the amount in revenues that a donated patent generates would work out.

    The original article mentions that tax breaks were actually stopped because they were abused.

  3. Re:Tax break for donating patents by Ambidisastrous · · Score: 3, Informative

    Yeah, but come on. They threw the baby out with the bathwater.

    It's curious how recently the writeoff was dumped. And dumped completely, rather than putting caps on the value of a writeoff or tinkering with the way a patent's value is calculated -- or working with the patent office to stop granting so many worthless patents. Clearly there's a public benefit in having companies release their unused patents; the knowledge is distributed and the free market can get to work immediately, rather than hanging around for the temporarily granted monopoly to expire.

    Summoning the power of my tinfoil hat, I see the following:

    • After granting huge, high-profile tax cuts in the few years leading up to 2004, the Bush administration scrambled to make up some of the revenue shortage by eliminating more obscure deductions. The alternative minimum tax soaked up some of the change; donated-patent deductions were also sacrificed for the cause, along with many other things.
    • Until recently, Big Business liked having lots of patents lying around. The big players had (and have) huge war chests of patents -- so that licensing squabbles with other big players have an overtone of mutually assured destruction, keeping negotiations under control; to keep dangerous upstarts in line; to list as company assets for interested parties; because silver-haired WASPs grew up thinking of patents as The American Way. If Big Business decides to take on patent law, the patent law will change.
    • IBM would probably be fine with donating some of its patents to the FSF or a similar patent-lefting (hmm, doesn't sound as good as copylefting) nonprofit organization. Except that, as a big company involved in something as radically un-American as free sofware, they need a sufficiently deadly patent portfolio to ward off an IT monopolist that the US government refuses to bust because they feel that having an operating-system monopolist on US soil gives them technological dominion over the rest of the world.
    • Idle patents are not the problem that needs fixing; they're a symptom of having oo many low-value patents granted in the first place. But giving back the incentive to relinquish patents would be nice.